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Monday, 3 January 2011

Survival of the fittest - Transport -

REGULATORY ENVIRONMENT: Saudi Arabia's regulatory environment has caused problems for nasair, CEO Simon Stewart said (Supplied Image)

REGULATORY ENVIRONMENT: Saudi Arabia's regulatory environment has caused problems for nasair, CEO Simon Stewart said (Supplied Image)

Unlike most airline executives Simon Stewart, CEO of Saudi Arabia’s only low cost carrier nasair, hasn’t had to battle declining passenger figures amid the global downturn.

Passenger traffic at his Riyadh-based airline increased from 800,000 in 2008 to 2.4 million last year and maintained a load factor of between 68 and 70 percent.

Instead Stewart has been forced to tackle his own unique set of problems, not least Saudi Arabia’s regulatory environment. “We are paying 117 percent over international rates inside the kingdom,” he says somewhat bitterly of oil prices. “The principal issue is that we didn’t receive or experience the same relief on fuel costs as enjoyed by Saudia [Saudi Arabian Airlines].”

Global Arab Network | UAE: Moody's downgrades Dubai Holding Commercial Operations bonds to B3

Moody's Investors Service has today downgraded to B3 from B2 the notes issued by Dubai Holding Commercial Operations MTN Ltd. under its Medium Term Note (MTN) programme. The Probability of Default Rating (PDR) of Dubai Holding Commercial Operations Group LLC (DHCOG) was left unchanged at B3, Global Arab Network reports according to a press statement. Moody's is maintaining its review for possible downgrade of the company's B2 Corporate Family Rating (CFR) as well as the MTN ratings and the PDR.

Today's rating action follows the statement by DHCOG on 30 December 2010 that it has reached an agreement with its banks for the USD555 million revolving credit facility (unrated). "Despite the limited information so far regarding the new terms, Moody's believes that the banks may now be in a preferential position vis-a-vis bondholders," says Martin Kohlhase, AVP-Analyst at Moody's in Dubai. "Moody's has accordingly reflected this by downgrading the debt instruments' ratings to B3," Mr. Kohlhase adds.

Moody's is maintaining the PDR at the B3 level to indicate the continued high default risk until the capital market debt is refinanced over the next 14 months when the following MTNs mature: CHF250 million (ca. USD240 million; July 2011) and USD500 million (February 2012).

Qatar's Stocks Climb to 2-Year High on Economic Growth; Dubai Shares Drop - Bloomberg

Qatar’s stocks climbed to the highest level in more than two years as nominal gross domestic product in the oil- and gas-rich Persian Gulf country increased. Dubai’s gauge declined for the first time in four days.

Industries Qatar, the second-biggest petrochemicals maker in the Middle East, gained for a fourth day. Barwa Real Estate Co., the nation’s largest publicly traded property developer by assets, advanced to the highest in a week. The QE Index gained 1.5 percent to 8,872.53, the highest since September 2008, at the 12:30 p.m. close in Doha. The MSCI Emerging Markets Index advanced 0.9 percent at 4:35 p.m. in Dubai, set for the highest close since June 2008.

"Qatar’s GDP growth came in higher than anticipated," said Omair Ansari, equity strategist at Gulfmena Alternative Investments in Dubai. "Earnings upgrades are expected due to the new mandates that will be allocated in anticipation of the World Cup."

Qatar invested $21.66bn around the world in 2010

Qatar’s sovereign wealth, one of the richest such corpus in the world, made investments worth a whopping $21.66bn in various avenues across the world in 2010, Al Sharq reported yesterday.

The daily said the Qatar Investment Authority (QIA) has invested sums totaling a staggering $21.66bn during 2010 in different sectors all over the globe.

Of the total, $3.9bn has been invested during last two-and-a-half months, starting from the mid-October to 2010-end, the daily said in what was an annual review of QIA’s investment activities.

gulfnews : UAE bank assets up 7.5% to Dh1.6tr

The UAE Central Bank said total bank assets increased by 7.5 per cent to Dh1.6 trillion at the end of November last year.

"Bank loans and advances increased 0.3 per cent during November and by 2.3 per cent during the first 11 months of 2010. [This] reflects banks' cautiousness and low demand from the private sector," the Central Bank said in a statement yesterday.

"When loans increase, it shows that there is an increase in investments, and this is a sign of a progressive economy," Dr Amjad Hossain, an economist at the UAE University in Al Ain told Gulf News by telephone.

Money Supply M1 in November remained at the same level as in October at AED 231.4 billion

The UAE Central Bank announced today that at the end of November 2010, Money Supply M1 (currency in circulation plus monetary deposits, current accounts and call accounts at banks) remained at the same level as in October, at AED 231.4 billion.

Broad Money Supply, M2 which comprises M1 plus quasi-monetary deposits (the sum of resident time and savings deposits in Dirhams, commercial prepayments in Dirhams and resident deposits in foreign currencies) decreased from AED 797.4 billion as at the end of October 2010 to AED 784.6 billion at end of November of the same year (-1.6%), due to a decrease in quasi-monetary deposits by AED 12.8 billion, the Bank said in a statement outlining monetary and banking developments for November.

Broader Money Supply M3 (M2 plus government deposits at the banking sector) decreased from AED 998.7 billion at the end of October 2010 to AED 987.0 billion at the end of November of the same year (-1.2%).

Female Shariah Scholars See Gender Gap Closing - Bloomberg

Asian Islamic financial institutions are attracting more female executives and scholars to fill a shortage of talent, setting a precedent for companies in the Middle East.

Malaysia’s Shariah Advisory Council appointed a second female scholar to its 11-member board in November. Indonesia has six women on its panel of 35 experts, Ma’ruf Amin, chairman of the country’s National Shariah Council, said in an interview Dec. 30. Malaysia’s central bank and the securities commission are both headed by women, while Liza Mohd Noor is chief executive officer at RAM Rating Services Bhd., which provides ratings for Islamic bonds.

“Previously, it was difficult for women to enter the industry; now people have broken that boundary, especially in Malaysia,” Aznan Hasan, associate professor at the Kuala Lumpur-based International Islamic University Malaysia, said in a Dec. 20 interview. “More women are coming in and this is good because we need people.”

Oman to Spend $78 Billion in Five-Year Plan, Focusing on Oil, Gas Output - Bloomberg

Oman plans to spend 30 billion rials ($78 billion) in its five-year development plan to 2015 and is forecasting economic growth of 5 percent a year, the official Oman News Agency said.

The program is based on an average oil price of $59 a barrel, the agency cited National Economy Minister Ahmed bin Abdulnabi Macki as saying. Oil production is projected at 897,000 barrels a day during the five-year period, the Muscat- based news agency said.

Oman wants to invest in oil and gas production to increase government revenue and attract investment. Hydrocarbons account for 70 percent of government revenue and 45 percent of foreign direct investment, Maqbool bin Ali bin Sultan, the Persian Gulf state’s minister of commerce and industry, said in October.

Nakheel Says Payments to Its Trade Creditors Reach $1.06 Billion to Date - Bloomberg

Nakheel PJSC, the developer building palm-shaped islands off Dubai’s coast, paid a total of 3.9 billion dirhams ($1.06 billion) to its trade creditors as it seeks approval to delay payments on at least $10.5 billion of loans and bills.

Nakheel, whose payments are part of an agreement to give contractors 40 percent of owed money in cash and the rest through a publicly traded Islamic bond, is seeking to secure the approval of creditors holding 95 percent of the debt by the end of the first quarter, it said in an e-mailed statement today.

The Dubai-based developer is renegotiating debt terms after the deepest financial crisis since the 1930s halved property prices in Dubai and left companies unable to raise funds. Nakheel said it reached an agreement with trade creditors with 91 percent of its debt on Dec. 29. The company had aimed to get approval from 95 percent of its creditors before end of 2010.

Complex market forces at play in UAE - The National

Any move to consolidate stock exchanges in the UAE would have significant repercussions in Gulf markets and around the world, and possibly spark the next wave of merger fever among global bourses.

Goldman Sachs, the US investment bank, is advising the Abu Dhabi Government on how to rationalise the three stock markets currently operating in the UAE. Although the bank is not talking in detail about its proposals, insiders believe it is likely at the very least to involve a merger between the Abu Dhabi Securities Exchange (ADX) and the Dubai Financial Market (DFM).

But, with a delicate web of relationships and cross-shareholdings between regional exchanges and the big global players in Europe and the US, Goldman Sachs is also likely to be thinking of the bigger strategic scene beyond the local set-up.

Qatar Stocks: 2010 Winners & Losers — Qatar Analysis — GCC Market Analytics

Qatar was where the action was in 2010 with the market rising by 25%.

The table below (click to enlarge) shows the 2010 percentage returns for Qatar stocks.
[ Click to Enlarge ]

January Seasonality — GCC Index Analysis , Seasonality — GCC Market Analytics

How have GCC stock markets performed during previous January's?

The chart below shows the average daily percentage change for each GCC market during each calendar month.

As you can see, for most GCC markets January has been slightly bearish in previous years.

[ Click to enlarge ]